1PitchBookData,Inc.JohnGabbertFounder,CEONizarTarhuniVicePresident,InstitutionalResearchandEditorialDanielCook,CFAHeadofQuantitativeResearchInstitutionalResearchGroupAnalysisKeytakeaways1Introduction2Thenatureofprivatemarketinvesting2Thedevelopmentofthesecondariesmarket3Thefirstevolutionofsecondaries:Structuredsolutions6Thesecondevolutionofsecondaries:GP-ledsecondaries6PerspectivesonGP-ledsecondaries8DifferentiatingbetweenLP-ledandGP-ledsecondariesasaninvestmentopportunity9Conclusion14ContentsPublishedonApril20,2023PublishingDesignedbyMaraPotterpbinstitutionalresearch@pitchbook.comDifferentiatingbetweenLP-ledandGP-ledsecondariesTheEvolutionofPrivateMarketSecondariesPitchBookisaMorningstarcompanyprovidingthemostcomprehensive,mostaccurate,andhard-to-finddataforprofessionalsdoingbusinessintheprivatemarkets.Keytakeaways•Venturecapitalandprivateequityexitactivityunderwentdramaticdeclinesin2022:USVCexitvaluesawaYoYdeclineof90.5%whileVCexitvaluesinEuropedecreased72.2%overthesameperiod.USandEuropeanPEexitvaluessawYoYdeclinesof66.3%and45.1%,respectively.Duetothelackofavailableexitavenues,allocatorshaveincreasinglyturnedtosecondariesasapotentialrouteforliquidity.•Globalannualsecondariestransactionvolumejumpedfrom$60billionin2020toapeakof$134billionin2021.Whilethevolumedecreasedto$111billionin2022,1therapidgrowthofthesecondariesmarkethighlightstheongoingneedforliquidityamongallocators.•Historically,theterm“secondaries”referredtoLP-ledsecondariesinwhichanLPwithprivatefundinterestswouldsellitsstakestoanotherLPorasecondariesfirm.However,asthesecondariesmarkethasevolved,GP-ledsecondarieshaveemergedasasignificantportionofthemarket:In2022,GP-ledsecondariesaccountedfor48%ofglobalsecondariesvolume.2•ThereareanumberofkeydifferencesbetweenLP-ledandGP-ledsecondaries,suchaslevelsofdiversification,returnexpectations,andthespeedofdistributions.1:GreenhillGlobalSecondaryMarketReview,Greenhill,February2023.2:“GlobalSecondaryMarketReview,”Jefferies,January2023.JulietClemensAnalyst,F...
